Key Energy to record 3Q charges; shares dive

Key Energy shares dive after co. announces 3rd-quarter charges, predicts results below Street

• On 2:55 pm EDT, Friday October 2, 2009

HOUSTON (AP) -- Shares of Key Energy Services Inc. tumbled Friday after the oil and gas rig company said it will record pretax charges of $155 million to $170 million for the quarter. The company also forecast a bigger loss than analysts predict.

Key Energy shares fell 51 cents, or 6.2 percent, to $7.73 in afternoon trading. The shares have ranged between $2.12 and $11.10 over the past year.

The company expects to post a pretax charge of $65 million to $70 million related to the retirement of about 250 well service rigs from its domestic fleet, and a pretax charge of $90 million to $100 million to write down the value of its fleet of pressure pumping equipment.

Key Energy said it likely will lose 19 cents to 23 cents a share for the quarter, excluding the charges. Analysts surveyed by Thomson Reuters expect a loss of 14 cents per share.

The company said the size of the quarterly loss reflects declining prices for its services this year.

After the rigs are retired, Key Energy will have 610 active rigs and 133 idled rigs.